ACCC sues Apple over “misleading” 4G iPad claim

news Australia’s competition regulator will tomorrow (Wednesday) take iconic technology giant Apple to court for advertising its new iPad tablet as featuring “4G” speeds — which are not supported on Australian telecommunications networks.

One of the key features of the new iPad is support for 4G speeds, which will allow users in countries such as the US and Canada to access the Internet much faster than the traditional 3G mobile broadband speeds which have become very widely used internationally over the past half-decade.

However, the 4G speeds which the new iPad supports will not be available in Australia, with Apple’s technical specifications page only listing it as supporting the 700Mhz and 2100Mhz spectrum bands, neither of which are being used in Australian telcos to provide 4G services. Telstra and Optus’ existing 4G rollouts are based on the 1800Mhz spectrum, although Optus is also planning a rollout in the 2.3GHz band. 4G is a term used to describe the next generation of wireless broadband services, which will allow speeds up to levels such as 100Mbps — far beyond the current generation of 3G services.

Apple Australia’s dedicated page for the new iPad currently states: “Designed with next-generation wireless technology, the new iPad with Wi-Fi + 4G connects to fast data networks around the world. So you can download content, stream video and browse the web at amazing speeds.”

However, if you click through to the features page for the new iPad, Apple has much more explicitly laid out what speeds the device supports in Australia. In the section about wireless speeds, Apple states the following: “The new iPad supports fast cellular networks the world over.2 So you can browse the web, stream content or download a movie at blazing-fast speeds. It also works on GSM/UMTS worldwide network technologies including HSPA, HSPA+ and DC-HSDPA — the fastest 3G networks out there. You’ll see downlink speeds up to 42 Mbps with DC-HSDPA and up to 21.1 Mbps with HSPA+.”

In addition, a minor footnote section explicitly states the limitations of the device in Australia: “4G LTE is supported only on AT&T and Verizon networks in the US; and on Bell, Rogers and Telus networks in Canada. Data plans sold separately. See your carrier for details.” Recent tests have shown that the new iPad is faster in Australia than the previous iPad 2, due to its support for the dual-channel HSDPA standard, which is supported on Telstra’s Next G network.

In a statement issued tonight, the Australian Competition & Consumer Commission said it would tomorrow make an application to the Federal Court in Melbourne against Apple and its Australian subsidiary for alleged contraventions of the Australian Consumer Law (ACL).

“The ACCC alleges that Apple’s recent promotion of the new “iPad with WiFi + 4G” is misleading because it represents to Australian consumers that the product “iPad with WiFi + 4G” can, with a SIM card, connect to a 4G mobile data network in Australia, when this is not the case,” the regulator said in a statement.

“The ACCC is seeking urgent interlocutory relief to ensure consumers are made aware of the correct technical capabilities of this device. Additionally the ACCC is seeking final orders including injunctions, pecuniary penalties, corrective advertising and refunds to consumers affected. Consumers who have purchased or are considering purchasing an “iPad with WiFi + 4G” should ensure that they have a proper understanding of the mobile data networks which this iPad can directly access by a SIM card.”

opinion/analysis
In my opinion, the ACCC is barking up the wrong tree here. Apple is clearly aware of the 4G situation in Australia and carefully modified its Australian advertisements and pages for the new iPad after the device locally to reflect the fact that 4G speeds are not available locally. I suspect that the ‘4G’ label is not prominent enough in the company’s advertising to attract the ire of the Federal Court. In addition, a swathe of articles have made the public very much aware that 4G speeds are not supported. In this, as with a number of things in the past, the ACCC appears to have not quite understood the niceties of Australia’s technology market.

20 COMMENTS

I would argue that this federal case is needed, as Apple are purposely misleading those who barely understand all the acronyms and technicalities, and who don’t any of the tech’ blogs at all.
Since these items are increasingly being adopted by our mums and grandmothers there needs to be extremely clear lines on what claims made.
As I only luckily caught my mother and grandmother before they went out and bought new iPads to explain that they will not get increased speeds, I may be biased.

The definition of 4G in itself is tricky. What Telstra calls 3G here is often marketed elsewhere in the world like AT&T HSPA 14.4 etc as 4G anyways (and the iPad/iPhone would actually show 4G logo with HSPA)

In which case you can argue that the new iPad is connecting to Telstra HSPA as 4G

The definition of 4G is not tricky at all. The ITU-R defines 4G as a wireless network capable of peak mobile downstream speeds of greater than 100Mbps, and peak stationary downstream speeds of greater than 1Gbps. Not even LTE meets that criteria, and as such I don’t hesitate to call any marketing that violates the ITU-R definition ‘misleading’.

I’m an RF engineer for a major telco, and I regularly correct people who try to talk to me about LTE as “4G”, because it bloody well isn’t. I’m sick of marketing idiots bastardising the tech industry in the pursuit of their own selfish agendas.

ITU themselves haven’t been entirely consistent on this. On Dec 2010, they said:

‘As the most advanced technologies currently defined for global wireless mobile broadband communications, IMT-Advanced is considered as “4G”, although it is recognized that this term, while undefined, may also be applied to the forerunners of these technologies, LTE and WiMax, and to other evolved 3G technologies providing a substantial level of improvement in performance and capabilities with respect to the initial third generation systems now deployed.’

Essentially ACCC is claiming that one company’s marketing message (Apple) is not ‘compatible’ with another company’s marketing message (Telstra).

Its a mess… In my opinion ITU has stuffed it up. Terms such as 4G, 3G can not be used to signify compatible standards. Though IMO, it never had anyway

See, this isn’t really about whose definition of 4G is correct. The fact is that Apple have decided to use the 4G label for its product purely based on its ability to use the American LTE frequencies. There is another technology labelled 4G in the states – Sprint’s WiMAX. Even though the new iPad can’t use WiMAX, it’s still reasonable to call the iPad a 4G device ~in America~.

So the question is, is it reasonable for Apple to carry this branding over to markets where no network designated as 4G uses those frequencies? And specifically here in Australia, does it violate any of our laws regarding marketing?

I think there is a case to be made here. Whether it’s worth pursuing is debatable for sure, but I think it could be a nice way to make the point that multinational companies like Apple need to take more care in localising their products, or at least localising their marketing.

> “Apple is clearly aware of the 4G situation in Australia and carefully modified its Australian advertisements and pages for the new iPad after the device locally to reflect the fact that 4G speeds are not available locally. I suspect that the ’4G’ label is not prominent enough in the company’s advertising to attract the ire of the Federal Court.”

You have to scroll down to the bottom of the tech specs page to see in tiny font “4G LTE is supported only on AT&T and Verizon networks in the US; and on Bell, Rogers and Telus networks in Canada. See your carrier for details. “, so I don’t really think they are making it clear enough that 4G is not supported in Australia at this time, and they definitely shouldn’t be advertising that iPad model as “WiFi + 4G”.

“Apple is clearly aware of the 4G situation in Australia and carefully modified its Australian advertisements and pages for the new iPad after the device locally to reflect the fact that 4G speeds are not available locally.”

Even if they have modified their advertising, it is still confounding the general masses.

Yes, there are telcos and network engineers who will argue the semantics (and applicability) of calling any network 4G, but apple’s marketing department will use the name that sounds the best rather than the one that is necessarily the most accurate worldwide. At least the ACCC is calling them on that particular tactic.

End result of this current news frenzy is that I have to try to explain 4G to my dad :\

The problem is that the wireless network operators, not Apple, not the ITU, screwed things up. Starting with AT&T, 4G is supposed to be 100Mbps, not 14.

The government regulators also screwed things up by auctioning incompatible spectrum, but this is again the American’s fault. Europe does 1800/900 , America does 800/1900, Australia/Asia does 1800/900,

Where things get sticky is with UMTS and LTE because they can do a type of channel bonding, utilizing multiple radios. So from a cost effectiveness point of view, it only makes sense to sell models that support all the local bands, and international travelers get the bum deal as they may only get one band supported at their destination, and even then, that’s at the whim of the phone manufacturer.

Right now there are no LTE chips with a power profile good enough to create a “world LTE” phone, even the new chips that come out this year will not have it, and there probably won’t be any until everyone standardizes on 700Mhz and starts tearing down their 2G GSM networks to repurpose their 800/900/1800/1900 bands.

Just look at T-mobile in the US, and Wind/Mobilicity in Canada, they don’t have iPhones or iPad support because they rolled out their 3G UMTS on AWS spectrum 1700/2100Mhz, when everyone else was rolling out LTE on it.

I can’t believe how much of a mess “4G” has become where there isn’t a single standard frequency band used anywhere.

This isn’t a new problem, the radio spectrum has never been carved up consistently.

Even back in the pre-digital days with R/C equipment you had Australia with cars on 27MHz AM, aircraft on 36MHz FM; United Kingdom/Europe with cars on 27MHz AM and 40MHz FM, aircraft on 35MHz FM and 40MHz AM; United States with cars on 29MHz AM and aircraft on 72MHz FM. Even now that most of the new R/C sets are going to the 2.4GHz band there are still incompatible modulation schemes being used.

It’s a complete foul-up. You’d think that regulatory bodies would have figured all this out decades ago and coordinate a single set of communications spectrums worldwide, wouldn’t you?

At least someone has done their homework and understands about frequency specrums and county standards. There is also another problem that peple have not mentioned, to my knowledge.

That is, even with 4g or even 5g speeds available to you it also depends on the distance you from your nearest cell tower is to your phone and if it is a rainy day or not along with the terrain environment you are in. Thanks

ACCC will also be suing BMW for advertising cars as being capable of speeds which have never been supported on Australian roads.

An ACCC spokesman said “This isn’t a populist move designed to get us soft interviews on TV at all. The fact that the companies we target are incredibly popular and successful is completely irrelevant. And raising our profile to help protect ourselves from anticipated budget cuts should there be a change in government never crossed our minds, not for a moment.”

Welcome! We were an energetic and engaged community of Australians who worked with or who were interested in technology -- all sorts of IT professionals, IT managers, CIOs, tech policy-makers and tech enthusiasts.